Bulletin

PepsiAmericas details division realignment, charge

CarolynPritchard

SAN FRANCISCO (MarketWatch) -- PepsiAmericas Inc. said after Wednesday's closing bell that its previously announced strategic realignment of U.S. business will go into effect Jan. 1 and will result in charges of $18 million.

The producer, seller and distributor of PepsiCo Inc.
PEP, +1.75%
beverages said in October that its U.S. division will establish dedicated channel sales teams with a more centralized operating framework. Late Wednesday, PepsiAmericas also said its field sales and delivery network will consolidate from 14 divisions to seven.

"Our new organization better aligns our selling and delivery efforts with our customers, improving top-line growth opportunities and increasing system efficiencies," Chief Executive of the division, Robert Pohlad, said in a statement.

PepsiAmericas expects to take a related charge, before taxes, of $18 million, primarily related to severance and other employee costs. Of the charge, the company expects to record $12 million in the fourth quarter. The rest, which will be mainly related to relocation costs, will be recorded throughout 2007.

The cash expenditures are expected to total $16 million, and will be paid primarily in 2007. Realignment savings will be reinvested in the business against longer-term capability and infrastructure initiatives, PepsiAmericas said.

The company in October said that its third-quarter net income dropped to $53.1 million, or 41 cents a share, from $63.7 million, or 47 cents a share, a year ago, missing a 47-cent-per-share average estimate on Wall Street.

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